South Africa’s Constitutional Court has upheld a ruling by a lower tribunal that allowed the government to renege on agreed salary increases for public servants, bolstering its efforts to rein in runaway debt and the budget deficit.
The top court announced that the ruling in a judgment published on its website on today, Monday.
The government is backtracking on an earlier agreement to raise pay for about 1.3 million employees in 2020, the final year of a three-year deal. The move is part of an effort to contain its wage bill, which grew at an inflation-beating annual average rate of 7.3% before the onset of the coronavirus pandemic.
The Labour Court in December 2020 dismissed an application by unions to force the state to fulfill the accord.
Meanwhile, organized labour have not responded to this latest ruling. Earlier, the Public Servant’s Association, which represents more than 240 000 state workers, said it intends to seek increases equivalent to the consumer inflation rate – which currently stands at 5.7% – plus two percentage points, and that it wants a single-year wage deal.
That compares with a budget estimate for the state’s annual salary bill to rise by an average of 1.8% annually over the next three fiscal years.
Remuneration costs account for about a third of total government expenditure, and agreeing to demands for continued inflation-beating increases would compromise the medium-term fiscal framework presented by Finance Minister Enoch Godongwana on February 23, 2022.